30th Mar 2016 09:13
LONDON (Alliance News) - UBS cut its price target on easyJet, as the Swiss bank believes uncertainty surrounding the Brexit referendum will be the main weight on the air carrier shares until the vote on June 23.
"While we see some potential upside to the shares we think investor uncertainties around Brexit, summer demand versus supply, whether 2016 is 'peak' earnings, and ability to cut costs will continue to make investors hesitant to build a stake in easyJet," said UBS analyst Jarrod Castle.
UBS cut its price target to 1,635.00p from 1,800.00p, but kept a Neutral recommendation.
The stock managed to recover somewhat easily from the slump in tourism-related companies shares following the terrorist attacks in Brussels last week. However, it is still down 12% year to date.
Shares in easyJet were up 0.3% Wednesday morning at 1,530.00 pence.
Nevertheless, UBS's Castle said he sees scope for positive developments going into May. The bank believes the second-quarter update expected on May 10 "is likely to dispel some concerns around cost control". UBS expects new cost measures to be highlighted by the company.
EasyJet's financial calendar for 2016 also compromises a third-quarter update on July 21 and its full-year results on November 15.
By Daniel Ruiz; [email protected]
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